Iran’s Oil Minister Masoud Mir-Kazemi said today the government’s subsidies of energy products had reached nearly $80 billion a year. The gradual removal of energy subsidies, a program started by the government late last year, would prevent waste and would channelize the country’s energy resources into reconstruction projects, Mir-Kazemi said [Fars News Agency, 3 March].
Mir-Kazemi’s remarks are the first official confirmation of the extent of government’s energy subsidies and its growth in the past 40 years. Iran’s oil revenues started rapid increase in early 70s and with it came increasing government subsidies of basic needs of the population, including gasoline, natural gas, electricity and other energy products. Reaching the $80 billion level was of course unsustainable, a trend the current subsidy reforms program is trying to reverse.